The taxation of Sovereign Wealth Funds in the United States is outmoded and due for reconsideration. Offering a tax exemption to the billion dollar investment funds owned by foreign governments is both unfair and fails to achieve the goals of the foreign sovereign tax exemption.
Founded in the principles of sovereign immunity, the foreign sovereign tax exemption, codified in I.R.C. §892, fails to satisfy the Congressional goals that motivated its creation. This Article explains the current taxation of foreign sovereigns and, by extension, Sovereign Wealth Funds. ............................................Full Article: Source